Broad coalition urges EU to uphold ‘double materiality’ in sustainability reporting rules
Over 300 investors, companies and civil society organisations have jointly called on European policymakers to safeguard the foundations of EU sustainable finance legislation. In an open letter, signatories express concern that the proposed Omnibus simplification package could weaken key frameworks such as the Corporate Sustainability Reporting Directive (CSRD).
The letter, now endorsed by 323 organisations, warns that diluting sustainability rules risks undermining both corporate transparency and fair competition across the European economy. Among the signatories are 104 investors (including Allianz SE, Nordea AM and Royal London), 40 companies (such as IKEA, Nokia and Vattenfall), and 74 supporting organisations, including Accountancy Europe and the Dutch Federation of Pension Funds.
At the centre of the appeal is the principle of double materiality, which underpins the European Sustainability Reporting Standards (ESRS). This concept requires companies to disclose both their impacts on people and the environment, and the sustainability-related risks to their business. According to the signatories, this dual perspective is essential for generating high-quality, decision-relevant information for investors and other stakeholders.
The statement also reflects growing international recognition of the double materiality approach. In June, the United Nations’ Financing for Development conference (FfD4) encouraged member states to promote sustainability reporting that covers impacts, risks and opportunities, aligned with global standards set by GRI and the International Sustainability Standards Board (ISSB).
The declaration is being coordinated by six leading organisations, including the European Sustainable Investment Forum (Eurosif), the UN Principles for Responsible Investment, and the Corporate Leaders Group Europe. Organisations may continue to sign the letter until 29 August. EU institutions are expected to resume discussions on the Omnibus legislative package after the summer recess.
Signatories are urging EU lawmakers not to compromise the ambition and integrity of Europe’s sustainability framework, and to ensure the EU maintains its leadership in the global transition to a transparent, fair and resilient economy.